Global crude oil news

17 Oct 2022 , 07:57 AM

Oil prices increased in light trading during the early Asian hours of Monday as investors awaited data from China to determine demand in the world’s largest crude oil importer.

Following a 6.4% decline the previous week, Brent crude futures increased 85 cents, or 0.9%, to $92.48 per barrel. After falling 7.6% last week, U.S. West Texas Intermediate crude was up 73 cents, or 0.9%, at $86.34 per barrel.

According to news reports, Oil gained support from a number of factors, including Chinese President Xi Jinping’s remarks at the Party Congress, which reaffirmed supportive measures for the economy and were seen as a positive indicator for the outlook for demand.

This week, trade and economic data from China are anticipated. The world’s No. 2 economy is likely in for its worst year since almost half a century due to Xi’s strict COVID-19 policy, despite the possibility that its third-quarter GDP growth may improve from the previous quarter.

Looking ahead, it is anticipated that oil prices will continue to fluctuate as OPEC+ production cutbacks compress supply prior to the European Union’s oil embargo and future U.S. Federal Reserve interest rate increases cap price increases.

James Bullard, president of the St. Louis Fed, stated on Friday that inflation has become “pernicious” and difficult to stop, necessitating the continuation of “frontloading” through greater rises of 0.75 percentage points.

The Organization of the Production Exporting Countries (OPEC) members and their allies, including Russia, lined up on Sunday to support the drastic production cut decided this month after the White House accused Riyadh of pressuring other countries into backing the initiative as part of an intensified verbal spat with Saudi Arabia.

On October 5, OPEC+ promised to reduce production by 2 million barrels per day; however, several members are already producing below their commitments, so the actual reduction will only be roughly 1 million barrels per day.

In spite of this, the top exporter Saudi Arabia will maintain consistent exports to significant Asian markets in November.

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